Slide 1: 12M 2018 Results Analyst & Investor presentation
12M 2018 Results Analyst & Investor presentation February 7th, 2019
Slide 2: 2016-2018 Strategic Plan: Transformation of MAPFRE business model
2016-2018 Strategic Plan > Transformation of MAPFRE business model in a complex market, focusing on profitable growth . . . Profitability > Focus on core business, Growth > Bancassurance and digital streamlining and downsizing transformation ‐ IBERIA > bearing the fruits of profitable ‐ Enhanced ban
Slide 3: 2016-2018 Strategic Plan: despite strong headwinds
2016-2018 Strategic Plan > . . . despite strong headwinds during 2016 to 2018 . . . Foreign exchange › US dollar: -6% (1) › Accumulated negative foreign exchange movements › Brazilian real: -14% (1) impact on premiums (2016-18) (2): › Turkish lira: -45% (1) > €2.8 bn Capital market › Relevant fall i
Slide 4: 2016-2018 Strategic Plan: commitment to shareholders
2016-2018 Strategic Plan > . . . and proving our commitment to shareholders Payout 56.5% 57.6% 63.7% 84.4% 63.6%* Dividends paid 2018 dividend against results 400 447 447 447 447 yield: 5.5% 2015 2016 2017 2018 2018 Earnings per share (€) 0.23 0.25 0.23 0.17 0.23* Dividend per share (€) 0.13 0.145 0
Slide 5: Enhancing MAPFRE's bancassurance footprint
2016-2018 Strategic Plan > Enhancing MAPFRE´s bancassurance footprint Optimization of existing Reorganization of New exclusive distribution agreement bancassurance alliance agreement in Non-Life in Spain June 2018 December 2018 January 2019 › MAPFRE now controls 100% of the › MAPFRE VIDA will acquir
Slide 6: 2016-2018 Strategic Plan: Key figures
2016-2018 Strategic Plan > Key figures KPI Target Status – 12M 2018 Combined ratio < 96 % › 97.6% (affected by NatCat) Expense ratio < 28 % › Target achieved, 27.8% › €26.6 bn at 2018 year end Income > €31 bn › €1.3 bn of premiums cancelled (1) › Over €2.8 bn negative foreign exchange impact on prem
Slide 7: Key Figures 12M 2018
Key Figures > 12M 2018 Δ 12M 2018 Δ (constant exchange rates) Revenue 26,590 -5.0% 0.8% Total written and accepted premiums 22,537 -4.0% 2.1% - Non-Life 17,061 -6.0% 0.2% - Life 5,476 2.8% 8.5% Non-Life Combined Ratio 97.6% -0.5 p.p Non-Life Loss Ratio 69.8% -0.9 p.p Non-Life Expense Ratio 27.8% 0.4
Slide 8: Goodwill writedowns: prudent approach in uncertain market context
Goodwill writedowns > Prudent approach in uncertain market context Goodwill Higher level of uncertainty in current market context: 2018 Outstanding Writedown balance ‐ Volatility in emerging markets ‐ Instability in Europe MAPFRE USA -129.7 640.5 ‐ Orderly slowdown in global growth Verti (Italy) -21
Slide 9: Highlights 12M 2018
Highlights > 12M 2018 Currency › Relevant impact from January to September, but better evolution in 4Q headwinds › Expected to be a drag on P&L during coming months, but to a lesser extent Non-Life: › Brazil gaining momentum in 2019 with the introduction of MAPFRE business model and new CEO Brazil &
Slide 10: Key figures by business unit
Key figures by business unit Premiums – Distribution by business unit Attributable result Premiums 12M 2018 Δ mn Δ% 12M 2018 Δ% GLOBAL RISKS IBERIA 480.6 (30.9) -6.0% 7,658 10.0% ASISTENCIA 4.8% LATAM 156.9 (72.4) -31.6% 6,887 -14.1% 3.7% BRAZIL 54.1 (71.2) -56.8% 3,972 -12.6% INSURANCE IBERIA LATAM
Slide 11: Resilient local currency growth and improving underlying trends (I/II)
Resilient local currency growth and improving underlying trends (I/II) IBERIA BRAZIL › Excellent Non-Life growth (+7%), across all business lines › Growth in Life (+4%*), thanks to lending activity recovery, and › Best in class combined ratio (93.8%), especially in Motor in General P&C (+6%*) with M
Slide 12: Resilient local currency growth and improving underlying trends (II/II)
Resilient local currency growth and improving underlying trends (II/II) EURASIA MAPFRE RE › Italy: growth in line with market context and improving › Resilient profitability levels, despite large NatCat events in combined ratio H2 2018 › Germany: premiums +5% › 2018 NatCat (Typhoons in Japan & US wi
Slide 13: Adjusted attributable result
Adjusted attributable result 12M 2017 12M 2018 Δ (mn) Δ (%) Attributable result 700.5 528.9 (171.6) -24.5% Weather related and NatCat claims (183.8) (108.3) 75.5 Direct insurance (48.2) (11.7) 36.5 GLOBAL RISKS (77.4) 77.4 2017 2018 MAPFRE RE (58.2) (96.6) (38.4) › Gain ABDA purchase (€13.5 mn) › US
Slide 14: Non-Life > Key figures
Non-Life > Key figures Result of Non-Life business Combined ratio Premiums 12M 2018 Δ% 12M 2018 Δ 12M 2018 Δ% IBERIA 420.4 -7.4% 93.8% 0.1 p.p 5,075 7.1% LATAM 252.1 -21.4% 98.2% 1.6 p.p 4,926 -16.1% BRAZIL 110.2 -45.1% 98.5% 2.5 p.p 2,616 -12.7% LATAM NORTH 42.1 3.7% 98.1% 0.1 p.p 966 -32.8% INSURA
Slide 15: Non-Life > Key highlights (I/III)
Non-Life > Key highlights (I/III) IBERIA Premiums Results › General P&C is growing at a strong rate (+13.5%) driven by › Excellent performance in Motor, based on tariff increases, Commercial Multirisk controlled claims costs and positive developments at Verti › Good performance in retail Motor in Sp
Slide 16: Non-Life > Key highlights (II/III)
Non-Life > Key highlights (II/III) NORTH AMERICA Premiums Results › USA: stable local currency trends in the Northeast, mitigating the › USA: fall in other states › East Coast storms: -€11.7 mn after tax › Puerto Rico: strong local currency growth (+23%) due to the › Exit plan: -€7.2 mn after tax re
Slide 17: Non-Life > Key highlights (III/III)
Non-Life > Key highlights (III/III) LATAM NORTH & SOUTH Premiums Results › Solid local currency growth in Mexico in Health (+23%), with a › Stable combined ratio in LATAM NORTH thanks to improvements in slowdown in Motor (-4%) Mexico, offset by higher loss experience in Panama in main lines of › Dou
Slide 18: Life > Key figures
Life > Key figures Result of Life business Premiums 12M 2018 Δ% 12M 2018 Δ% IBERIA 231.9 -3.8% 2,583 16.3% BRAZIL 364.4 -9.9% 1,356 -12.6% OTHER* 85.2 14.9% 1,538 -1.1% TOTAL 681.5 -5.3% 5,476 2.8% *Includes all other Life business, as well as consolidation adjustments Million euros 18
Slide 19: Life > Key highlights
Life > Key highlights IBERIA Premiums Results › Strong underlying growth: +5%, excluding the impact of UNIÓN › Fall in result due to 2017 one-offs: cancellation of a DUERO VIDA premiums in 12M 2017 (€36 mn) and a large group bancassurance contingent payment provision (€29 mn pre-tax) policy in 3Q 20
Slide 20: Change in shareholders' equity and currency impact
Even though the US dollar has proven to be an effective hedge, market volatility has been a drag on shareholders’ equity . . . Change in shareholders’ equity (12.31.2018) Currency conversion differences Balance at 12/31 previous year 8,611 %Δ 12.31.2018 Δ YTD currency Result for the period 529 YTD D
Slide 21: Assets under Management
. . . as well as Assets under Management Investment portfolio – Breakdown by asset class Assets under Management 49.3 -2.7% Other investments (9.6%) 4.7 60.1 58.5 Cash (4.5%) 2.2 10.3 Mutual funds (2.7%) 1.3 -10.5% 9.2 Equity (4.9%) 2.4 2.1 Real Estate (4.3%) Corporate fixed income 8.9 49.8 -1.0% 49
Slide 22: Resilient portfolio yields with lower realized gains
Resilient portfolio yields with a lower level of realized gains in a highly volatile market Actively managed portfolios1 - Non-Life (€7.2 bn) Actively managed portfolios1 - Life (€6.2 bn) 6.4 6.7 6.8 6.9 6.8 Duration (%) 6.8 7.1 7.0 6.7 6.6 Duration (%) 4.10 3.93 3.97 3.94 2.59 3.91 2.40 2.34 2.34 2
Slide 23: High level of financial flexibility and strong credit metrics
High level of financial flexibility and strong credit metrics Capital structure Leverage (%) Subordinated 22.5% Bank debt financing 9% 18.1% 5% Senior debt 8% Equity € 11.9 78% billion 12.31.2017 12.31.2018 Interest coverage (x) Highlights 17.7 18.4 › High level of financial flexibility › €510 mn of
Slide 24: Robust and resilient solvency position
Robust and resilient solvency position, despite high market volatility throughout the year Pro-forma Brazil transaction at 09.30.2018 Solvency II ratio 200.2% 203.1% 201.7% 207.9% 195.6% Fully loaded* 179.9% 183.9% 182.5% 188.6% 177.0% 8.9 9.0 8.9 9.2 -12.3 p.p. impact 4.4 4.4 4.4 4.4 12.31.2017 03.
Slide 25: Wrap up
Wrap up Transformation of MAPFRE business model > in a complex market Focus on profitable growth > strong profit contribution from IBERIA, MAPFRE RE, LATAM NORTH & LATAM SOUTH Strengthened distribution footprint > enhancing bancassurance agreements Brazil to gain momentum> better Life outlook, new N
Slide 26: Terminology
Terminology Revenue Top line figure which includes premiums, financial income, and revenue from non-insurance entities and other revenue Combined ratio – Non-Life Expense ratio + Loss ratio Expense ratio – Non-Life (Operating expenses, net of reinsurance – other technical revenue + other technical e
Slide 27: Investor Relations
Investor Relations September 2018 Natalia Núñez Investor Relations and Capital Markets Director Financial results natalia.n@mapfre.com Analyst and investor presentation November 8th. 2018 Antonio Triguero Leandra Clark Marta Sanchidrián Raquel Alfonso atriguero@mapfre.com clarkle@mapfre.com sanchim@
Slide 28: Agenda: financial calendar
Agenda Results presentation 2018 02/07/2019 AGM 03/08/2019 Investor Day 03/25/2019 September 2018 Black-out period 04/09 - 04/29/2019 Financial results Results presentation 1Q 2019 04/30/2019 Analyst and investor Black-out presentation period 07/04 - 07/24/2019 November 8thpresentation Results . 201
Slide 29: Contact us
Contact us If you are an investor or shareholder and would like to receive more information regarding the MAPFRE share or have questions regarding MAPFRE´s results and strategy, please find our contact information below: September 2018 Shareholders Investors Financial Investor Relations results MAPF
Slide 30: Disclaimer
Disclaimer This document is purely informative. Its content does not constitute, nor can it be interpreted as, an offer or an invitation to sell, exchange or buy, and it is not binding on the issuer in any way. The information about the plans of the Company, its development, its results and its divi